Next boosts outlook on bumper festive trading
By Abigail Townsend
Date: Tuesday 06 Jan 2026
(Sharecast News) - High street retailer Next lifted full-year guidance on Tuesday, on the back of better-than-expected festive trading.
In the nine weeks to 27 December, full-price sales rose 10.6% year-on-year, comfortably ahead of forecasts for a 7% improvement across the entire quarter.
In the UK, sales rose 5.9%, while international sales soared 38.3%, far outstripping guidance for a 24.3% uplift.
As a result, the company now expects total group sales in the year to 31 January to come in at £6.97bn, a 10.3% increase year-on-year. Pre-tax profits are expected to rise 13.7% to £1.15m. Next had previously guided for annual sales of £6.87bn and pre-tax profits of £1.14bn.
However, the fashion and homeware brand - which is known for its conservative forecasts - adopted a notably more cautious outlook for the following year.
It expects growth to slow, with total group sales forecast to rise 4.2% to £7.26bn, and pre-tax profits to rise by 4.5% to £1.2bn.
Total full price sales are expected to grow by 4.5%, notably slower than the 10.7% rise slated for the current year. Next attributed the slowdown to tough comparatives, after the warm summer and disruption at Marks & Spencer boosted trading earlier this year.
It also warned: "Continuing pressures on UK employment are likely to filter through into the consumer economy as the year progresses."
As at 0930 GMT, shares in Next were trading 2% higher at 13,875p.
Richard Hunter, head of markets at Interactive Investor, said: "Next has delivered another classic update, following a stronger-than-expected Christmas showing and, in typical fashion, has exceeded previous estimates, upped its profit guidance...while providing a cautious outlook - a positive cocktail which investors have almost come to expect."
David Hughes, equity research analyst at Shore Capital, said: "While the price has come down slightly in the past two months, Next equity still trades on a valuation premium.
"Though we remain long-term fans of the company, at this price, and with the cautious outlook on the UK, we are happy with our fair value to 14,750p and our corresponding 'hold' recommendation.
"Having said that, we will be keenly watching both the valuation of the company and the outlook for UK apparel for an opportunity to take a more constructive outlook on the stock."
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